BTB.UN BTB Real Estate Investment Trust

__________________________

⁽¹⁾ Non-IFRS financial measure. See Appendix 1. 

Quarter

Year

2023

2022

2023

2022

Occupancy – committed (%)

94.2 %

92.8 %

Signed new leases (in sq.ft.)

78,340

49,568

296,240

167,602

Renewed leases at term (in sq.ft.)

126,427

87,399

384,558

356,454

Renewal rate (%)

73.4 %

53.0 %

62.4 %

63.0 %

Renewed leases prior to the end of the term (in sq.ft.)

32,363

66,633

101,193

148,736

Average increase lease renewal rental rate

14.3 %

8.0 %

9.2 %

12.2 %

Periods ended December 31

               Quarter                      Year

(in thousands of dollars, except for ratios and per unit data)

2023

2022

2023

2022

$

$

$

$

Rental revenue

31,922

31,486

127,826

119,495

Net operating income (NOI)

19,255

18,624

75,379

70,430

Net income and comprehensive income

1,734

1,769

36,598

38,154

Adjusted EBITDA ⁽¹⁾

18,065

16,347

69,719

64,409

Same-property NOI ⁽¹⁾

17,636

16,552

66,533

65,152

FFO Adjusted ⁽¹⁾

9,688

10,059

38,946

37,879

FFO adjusted payout ratio

67.2 %

63.6 %

66.5 %

66.1 %

AFFO Adjusted ⁽¹⁾

8,966

8,550

34,956

34,137

AFFO adjusted payout ratio

72.6 %

74.9 %

74.1 %

73.3 %

FINANCIAL RESULTS PER UNIT

Net income and comprehensive income

2.0¢

2.1¢

42.4¢

45.7¢

Distributions

7.5¢

7.5¢

30.0¢

30.0¢

FFO Adjusted ⁽¹⁾

11.1¢

11.8¢

45.1¢

45.4¢

AFFO Adjusted ⁽¹⁾

10.3¢

10.0¢

40.5¢

40.9¢

___________________________

⁽¹⁾ Non-IFRS financial measure. See Appendix 1. The referred non-IFRS financial measures do not have a standardized meaning prescribed by IFRS and these measures cannot be compared to similar measures used by other issuers.

Periods ended December 31

Year

(in thousands of dollars, except for ratios and per unit data)

2023

2022

$

$

Total assets

1,227,648

1,179,340

Total debt ratio ⁽¹⁾

58.6 %

58.5 %

Mortgage debt ratio ⁽²⁾

52.2 %

54.2 %

Weighted average interest rate on mortgage debt

4.37 %

4.09 %

Market capitalization

254,048

311,120

Market price of units

2.93

3.65

NAV per unit ⁽¹⁾

5.42

5.42

_____________________________

⁽¹⁾ Non-IFRS financial measure. See Appendix 1. The referred non-IFRS financial measures do not have a standardized meaning prescribed by IFRS and these measures cannot be compared to similar measures used by other issuers.

⁽²⁾ This is a non-IFRS financial measure. The mortgage debt ratio is calculated by dividing the mortgage loans outstanding by the total gross value of the assets of the Trust less cash and cash equivalents.

⁽³⁾ Includes a property in Edmonton reclassified as a finance lease and not included in fair value.

TIME:

9 am, Eastern Time

URL ENTRY:

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DIAL:

Local: 1-416-764-8688

WEB:

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VISUAL:

A presentation will be uploaded on BTB's website prior to the call

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DEFINITION

Adjusted net income

Adjusted net income is a non-IFRS financial measure that starts with net income and comprehensive income and removes the effects of: (i) fair value adjustment of investment properties; (ii) fair value adjustment of derivative financial instruments; (iii) fair value adjustment of Class B LP units; and (iv) transaction costs incurred for acquisitions and dispositions of investment properties and early repayment fees.

The Trust considers this to be a useful measure of operating performance, as fair value adjustments can fluctuate widely with the real estate market and transaction costs are non-recurring in nature.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA")

Adjusted EBITDA income is a non-IFRS financial measure that starts with net income and comprehensive income and removes the effects of certain adjustments, on a proportionate basis, including: (i) interest expense; (ii) taxes; (iii) depreciation of property and equipment; (iv) amortization of intangible assets; (v) fair value adjustments (including adjustments of investment properties, of financial instruments, of Class B LP units and of unit price adjustments related to unit-based compensation); (vi) transaction costs for acquisitions and dispositions of investment properties and early repayment fees; and (vii) straight-line rental revenue adjustments.

The most directly comparable IFRS measure to Adjusted EBITDA is net income and comprehensive income. The Trust believes Adjusted EBITDA is a useful metric to determine its ability to service debt, to finance capital expenditures and to provide distributions to its Unitholders.

Same-Property NOI

Same-Property NOI is a non-IFRS financial measure defined as net operating income ("NOI") for the properties that the Trust owned and operated for the entire duration of both the current year and the previous year. The most directly comparable IFRS measure to same-property NOI is Operating Income.

The Trust believes this is a useful measure as NOI growth can be assessed on its portfolio by excluding the impact of property acquisitions and dispositions of both the current year and previous year. The Trust uses the Same-Property NOI to indicate the profitability of its existing portfolio operations and the Trust's ability to increase its revenues, reduce its operating costs and generate organic growth.

Funds from Operations ("FFO")

and FFO Adjusted

FFO is a non-IFRS financial measure used by most Canadian real estate investment trusts based on a standardized definition established by REALPAC in its January 2022 White Paper ("White Paper"). FFO is defined as net income and comprehensive income less certain adjustments, on a proportionate basis, including: (i) fair value adjustments on investment properties, class B LP units and derivative financial instruments; (ii) amortization of lease incentives; (iii) incremental leasing costs; and (iv) distribution on class B LP units. FFO is reconciled to net income and comprehensive income, which is the most directly comparable IFRS measure. FFO is also reconciled with the cash flows from operating activities, which is an IFRS measure.

FFO Adjusted is also a non-IFRS financial measure that starts with FFO and remove the impact of non-recurring items such as transaction cost on acquisitions and dispositions of investment properties and early repayment fees.

The Trust believes FFO and FFO Adjusted are key measures of operating performance and allow the investors to compare its historical performance.

Adjusted Funds from Operations ("AFFO")

and

AFFO Adjusted

AFFO is a non-IFRS financial measure used by most Canadian real estate investment trusts based on a standardized definition established by REALPAC in its White Paper. AFFO is defined as FFO less: (i) straight-line rental revenue adjustment; (ii) accretion of effective interest; (iii) amortization of other property and equipment; (iv) unit-based compensation expenses; (v) provision for non-recoverable capital expenditures; and (vi) provision for unrecovered rental fees (related to regular leasing expenditures). AFFO is reconciled to net income and comprehensive income, which is the most directly comparable IFRS measure. AFFO is also reconciled with the cash flows from operating activities, which is an IFRS measure.

AFFO Adjusted is also a non-IFRS financial measure that starts with AFFO and removes the impact of non-recurring items such as transaction costs on acquisitions and dispositions of investment properties and early repayment fees.

The Trust considers AFFO and AFFO Adjusted to be useful measures of recurring economic earnings and relevant in understanding its ability to service its debt, fund capital expenditures and provide distributions to unitholders.

FFO and AFFO per unit

and

FFO adjusted and AFFO adjusted per unit

FFO and AFFO per unit and FFO adjusted and AFFO adjusted per unit are non-IFRS financial measures used by most Canadian real estate investment trusts based on a standardized definition established by REALPAC in its White Paper. These ratios are calculated by dividing the FFO, AFFO, FFO adjusted and AFFO adjusted by the Weighted average number of units and Class B LP units outstanding.

The Trust believes these metrics to be key measures of operating performances allowing the investors to compare its historical performance in relation to an individual per unit investment in the Trust.

FFO and AFFO payout ratios

and

FFO Adjusted and AFFO Adjusted payout ratios

FFO and AFFO payout ratios and FFO Adjusted and AFFO Adjusted payout ratios are non-IFRS financial measures used by most Canadian real estate investment trusts based on a standardized definition established by REALPAC in its White Paper. These payout ratios are calculated by dividing the actual distributions per unit by FFO, AFFO and FFO Adjusted and AFFO Adjusted per unit in each period.

The Trust considers these metrics a useful way to evaluate its distribution paying capacity.

Total debt ratio

Total debt ratio is a non-IFRS financial measure of the Trust financial leverage, which is calculated by taking the total long-term debt less cash divided by total gross value of the assets of the Trust less cash.

The Trust considers this metric useful as it indicates its ability to meet its debt obligations and its capacity for future additional acquisitions.

Interest Coverage Ratio

Interest coverage ratio is a non-IFRS financial measure which is calculated by taking the Adjusted EBITDA divided by interest expenses net of financial income (interest expenses exclude early repayment fees, accretion of effective interest, distribution on Class B LP units, accretion of non-derivative liability component of convertible debentures and the fair value adjustment on derivative financial instruments and Class B LP units).

The Trust considers this metric useful as it indicates its ability to meet its interest cost obligations for a given period.

Debt Service Coverage Ratio

Debt service coverage ratio is a non-IFRS financial measure which is calculated by taking the Adjusted EBITDA divided by the Debt Service Requirements, which consists of principal repayments and interest expenses net of financial income (interest expenses exclude early repayment fees, accretion of effective interest, distribution on Class B LP units, accretion of non-derivative liability component of convertible debentures and the fair value adjustment on derivative financial instruments and Class B LP units).

The Trust considers this metric useful as it indicates its ability to meet its interest cost obligations for a given period.

Provision For Non-Recoverable Capital Expenditures

In calculating adjusted AFFO, the Trust deducts a provision for non-recoverable capital expenditures to consider capital expenditures invested to maintain the condition of its properties and to preserve rental revenue.

The provision for non-recoverable capital expenditures is calculated based on 2% of rental revenues. This provision is based on management's assessment of industry practices and its investment forecasts for the coming years.

Provision For Unrecovered Rental Fees

The Trust also deducts a provision for unrecovered rental fees in the amount of approximately 25¢ per sq. ft. on an annualized basis. Even though quarterly rental fee disbursements vary significantly from one quarter to another, management considers that this provision fairly presents, in the long term, the average disbursements not recovered directly in establishing the rent that the Trust will undertake. These disbursements consist of inducements paid or granted when leases are signed that are generally amortized over the term of the lease and are subject to an equivalent increase in rent per square foot, and of brokerage commissions and leasing payroll expenses.

Total Long-Term Debt Less Cash And Cash Equivalents

This is a non-IFRS financial measure. Long-term debt less cash and cash equivalent is a non-IFRS financial measure, calculated as the total of (i) fixed-rate mortgage loans payable; (ii) floating rate mortgage loans payable; (iii) Series G debenture capital amount; (iv) Series F debenture capital adjusted with non-derivative component fewer conversion options exercised by holders; and (v) credit facilities, less cash, and cash equivalents. The most directly comparable IFRS measure to net debt is debt.

Total Gross Value Of The Assets Of The Trust Less Cash And Cash Equivalent

This is a non-IFRS financial measure. Gross value of the assets of the Trust less cash and cash equivalent ("GVALC") is a non-IFRS financial measure defined as the Trust's total assets adding the cumulated amortization property and equipment and removing the cash and cash equivalent. The most directly comparable IFRS measure to GVALC is total assets.

Years ended December 31

Year

(in thousands of dollars, except for per unit)

2023

2022

2021

$

$

$

Net income and comprehensive income (IFRS)

36,598

38,154

41,568

Fair value adjustment on investment properties

(2,001)

8,201

(19,571)

Fair value adjustment on Class B LP units

(976)

(149)

231

Amortization of lease incentives

2,783

3,113

3,292

Fair value adjustment on derivative financial instruments

1,233

(14,216)

3,246

Leasing payroll expenses ⁽⁶⁾

1,443

1,243

784

Distributions – Class B LP units

172

104

108

Unit-based compensation (Unit price remeasurement) ⁽⁵⁾

(389)

(182)

189

FFO ⁽¹⁾

38,863

36,268

29,847

Transaction costs on disposition of investment properties and mortgage early repayment fees

83

1,611

297

FFO Adjusted ⁽¹⁾

38,946

37,879

30,144

FFO per unit ^{(1) (2) (3)}

45.0¢

43.5¢

41.7¢

FFO Adjusted per unit ^{(1) (2) (4)}

45.1¢

45.4¢

42.1¢

FFO payout ratio ⁽¹⁾

66.6 %

69.0 %

71.9 %

FFO Adjusted payout ratio ⁽¹⁾

66.5 %

66.1 %

71.2 %

(1)

This is a non-IFRS financial measure.

(2)

Including Class B LP units.

(3)

The FFO per unit ratio is calculated by dividing the FFO ⁽¹⁾ by the Trust's unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period).

(4)

The FFO Adjusted per unit ratio is calculated by dividing the FFO Adjusted ⁽¹⁾ by the Trust's unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period).

(5)

The impact of the unit price remeasurement on the deferred unit-based compensation plan has been considered in the calculation of the FFO Adjusted and AFFO Adjusted starting Q2 2021. As a reference, the cumulative impact for the 12 months cumulative period in 2020 was positive $373 or 0.1¢ per unit.

(6)

The impact of the CIO compensation, hired in Q2 2022, was added to the Leasing payroll expenses during Q4 2022 as his duties were mainly leasing activities throughout the year.

Years ended December 31

Year

(in thousands of dollars except for per unit)

2023

2022

2021

$

$

$

FFO ⁽¹⁾

38,863

36,268

29,847

Straight-line rental revenue adjustment

(1,963)

(1,822)

(1,334)

Accretion of effective interest

1,095

1,127

1,301

Amortization of other property and equipment

99

122

87

Unit-based compensation expenses

836

721

877

Provision for non-recoverable capital expenditures ⁽¹⁾

(2,557)

(2,390)

(2,007)

Provision for unrecovered rental fees ⁽¹⁾

(1,500)

(1,500)

(1,500)

AFFO ⁽¹⁾

34,873

32,526

27,271

Transaction costs on disposition of investment properties and mortgage early repayment fees

83

1,611

297

AFFO Adjusted ⁽¹⁾

34,956

34,137

27,568

AFFO per unit ^{(1) (2) (3)}

40.4¢

40.4¢

38.1¢

AFFO Adjusted per unit ^{(1) (2) (4)}

40.5¢

40.5¢

38.5¢

AFFO payout ratio ⁽¹⁾

74.2 %

74.2 %

78.7 %

AFFO Adjusted payout ratio ⁽¹⁾

74.1 %

74.1 %

77.9 %

⁽¹⁾       

This is a non-IFRS financial measure.

⁽²⁾       

Including Class B LP units.

⁽³⁾       

The AFFO per unit ratio is calculated by dividing the AFFO ⁽¹⁾ by the Trust's unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period).

⁽⁴⁾       

The AFFO Adjusted per unit ratio is calculated by dividing the AFFO Adjusted ⁽¹⁾ by the Trust's unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period).

December 31, 2023

December 31, 2022

$

$

Cash and cash equivalents

(912)

(2,404)

Mortgage loans outstanding ⁽¹⁾

640,425

638,441

Convertible debentures ⁽¹⁾

43,185

43,170

Credit facilities

36,359

9,897

Total long-term debt less cash and cash equivalents ^{(2) (3)}

719,057

689,104

Total gross value of the assets of the Trust less cash and cash equivalents ^{(2) (4)}

1,227,949

1,178,049

Mortgage debt ratio (excluding convertible debentures and credit facilities) ^{(2) (5)}

52.2 %

54.2 %

Debt ratio – convertible debentures ^{(2) (6)}

3.5 %

3.7 %

Debt ratio – credit facilities ^{(2) (7)}

3.0 %

0.8 %

Total debt ratio ⁽²⁾

58.6 %

58.5 %

⁽¹⁾

Before unamortized financing expenses and fair value assumption adjustments.

⁽²⁾

This is a non-IFRS financial measure.

⁽³⁾

Long-term debt less free cash flow is a non-IFRS financial measure, calculated as total of: (i) fixed rate mortgage loans payable; (ii) floating rate mortgage loans payable; (iii) Series G debenture capital amount; (iv) Series F debenture capital adjusted with non-derivative component less conversion options exercised by holders; and (v) credit facilities, less cash and cash equivalents. The most directly comparable IFRS measure to net debt is debt.

⁽⁴⁾

Gross value of the assets of the Trust less cash and cash equivalent ("GVALC") is a non-IFRS financial measure defined as the Trust total assets adding the cumulated amortization property and equipment and removing the cash and cash equivalent. The most directly comparable IFRS measure to GVALC is total assets.

⁽⁵⁾

Mortgage debt ratio is calculated by dividing the mortgage loans outstanding by the GVALC.

⁽⁶⁾

Debt ratio – convertible debentures is calculated by dividing the convertible debentures by GVALC.

⁽⁷⁾

Debt ratio – credit facilities is calculated by dividing the credit facilities by the GVALC.

2023

Q-4

2023

Q-3

2023

Q-2

2023

Q-1

2022

Q-4

2022

Q-3

2022

Q-2

2022

Q-1

(in thousands of dollars, except for per unit)

$

$

$

$

$

$

$

$

Net income and comprehensive income (IFRS)

1,734

15,216

10,846

8,802

1,769

11,693

18,243

6,449

Fair value adjustment on investment properties

4,480

(6,481)

-

-

7,781

1,230

197

(1,007)

Fair value adjustment on Class B LP units

(42)

(159)

(775)

-

160

(142)

(233)

66

Amortization of lease incentives

641

664

750

728

787

773

818

735

Fair value adjustment on derivative financial instruments

2,396

(584)

(763)

184

(1,971)

(3,898)

(9,344)

997

Leasing payroll expenses ⁽⁶⁾

401

359

327

356

682

182

158

221

Distributions – Class B LP units

52

56

42

22

26

26

26

26

Unit-based compensation (Unit price remeasurement) ⁽⁵⁾

(11)

(87)

(232)

(59)

198

(172)

(285)

77

FFO ⁽¹⁾

9,651

8,984

10,195

10,033

9,432

9,692

9,580

7,564

Transaction costs on disposition of investment properties and mortgage early repayment fees

37

46

-

-

627

93

138

753

FFO Adjusted ⁽¹⁾

9,688

9,030

10,195

10,033

10,059

9,785

9,718

8,317

FFO per unit ^{(1) (2) (3)}

11.1¢

10.3¢

11.8¢

11.7¢

11.0¢

11.4¢

11.3¢

9.7¢

FFO Adjusted per unit ^{(1) (2) (4)}

11.1¢

10.4¢

11.8¢

11.7¢

11.8¢

11.5¢

11.4¢

10.7¢

FFO payout ratio ⁽¹⁾

67.5 %

72.9 %

63.8 %

64.1 %

67.9 %

65.9 %

66.4 %

77.2 %

FFO Adjusted payout ratio ⁽¹⁾

67.2 %

72.5 %

63.8 %

64.1 %

63.6 %

65.2 %

65.5 %

70.2 %

⁽¹⁾

This is a non-IFRS financial measure.

⁽²⁾

Including Class B LP units.

⁽³⁾

This is a non-IFRS financial measure. The FFO per unit ratio is calculated by dividing the FFO ⁽¹⁾ by the Trust's unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period).

⁽⁴⁾

This is a non-IFRS financial measure. The recurring FFO per unit ratio is calculated by dividing the recurring FFO ⁽¹⁾ by the Trust's unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period).

⁽⁵⁾

The impact of the unit price remeasurement on the deferred unit-based compensation plan has been considered in the calculation of the recurring FFO and AFFO starting Q2 2021.

⁽⁶⁾

The impact of the CIO compensation, hired in Q2 2022, was added to the Leasing payroll expenses during Q4 2022 as his duties were mainly leasing activities throughout the year.

2023

Q-4

2023

Q-3

2023

Q-2

2023

Q-1

2022

Q-4

2022

Q-3

2022

Q-2

2022

Q-1

(in thousands of dollars, except for per unit)

$

$

$

$

$

$

$

$

FFO ⁽¹⁾

9,651

8,984

10,195

10,033

9,432

9,692

9,580

7,564

Straight-line rental revenue adjustment

(197)

(842)

(291)

(633)

(1,077)

(521)

(74)

(150)

Accretion of effective interest

310

271

278

236

336

219

284

288

Amortization of other property and equipment

20

33

23

23

31

35

26

30

Unit-based compensation expenses

159

184

237

256

206

130

312

73

Provision for non-recoverable capital expenditures ⁽¹⁾

(639)

(626)

(634)

(658)

(630)

(599)

(580)

(581)

Provision for unrecovered rental fees ⁽¹⁾

(375)

(375)

(375)

(375)

(375)

(375)

(375)

(375)

AFFO ⁽¹⁾

8,929

7,629

9,433

8,882

7,923

8,581

9,173

6,849

Transaction costs on disposition of investment properties and mortgage early repayment fees

37

46

-

-

627

93

138

753

AFFO Adjusted ⁽¹⁾

8,966

7,675

9,433

8,882

8,550

8,674

9,311

7,602

AFFO per unit ^{(1) (2) (3)}

10.2¢

8.8¢

10.9¢

10.3¢

9.3¢

10.1¢

10.8¢

8.8¢

AFFO Adjusted per unit ^{(1) (2) (4)}

10.3¢

8.8¢

10.9¢

10.3¢

10.0¢

10.2¢

11.0¢

9.7¢

AFFO payout ratio ⁽¹⁾

72.9 %

85.8 %

69.0 %

72.4 %

80.8 %

74.4 %

69.4 %

85.3 %

AFFO Adjusted payout ratio ⁽¹⁾

72.6 %

85.3 %

69.0 %

72.4 %

74.9 %

73.6 %

68.3 %

76.8 %

⁽¹⁾

This is a non-IFRS financial measure.

⁽²⁾

Including Class B LP units.

⁽³⁾

The AFFO per unit ratio is calculated by dividing the AFFO ⁽¹⁾ by the Trust's unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period).

⁽⁴⁾

The recurring AFFO per unit ratio is calculated by dividing the recurring AFFO ⁽¹⁾ by the Trust's unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period).